The Marketplace Fairness Act would give all states the ability to collect taxes from all out-of-state online vendors that sell goods to their residents, the Post reports.

The bill isn't really a new tax liability because online purchases are already supposed to be taxed. If you live in a state that charges sales tax and buy something online tax-free, you're supposed to calculate the tax yourself and add it to your state tax bill.

Here's how the Marketplace Fairness Act could affect small businesses:

The Down Side: Tax Confusion

Since sales tax rules vary from state to state, collecting state and local sales taxes all around the country would require quite a bit of effort for online retailers, NPR reports. This isn't a big deal for big retailers, but it could be pretty burdensome for smaller online retailers.

From the perspective of big retailers like Amazon, the new burden on small businesses is a good thing -- it makes life tougher for smaller, would-be competitors.

The Up Side: Small Business Exemption

To protect small businesses from being overburdened, small businesses which generate less than $1 million in annual revenue will be exempt from collecting interstate sales tax, according to The Inquisitr. Basically, this gives a slight advantage to small startup websites over other higher revenue-generating competitors that would have to charge sales tax.

This isn't the first bill about an Internet sales tax. To weather the recession, nine states -- including New York, California, Pennsylvania and Texas -- have passed so-called "Amazon" taxes that require the online retailer to charge sales tax for customers who live in their states, the Post reports.